Question 1

What is a royalty?

Accepted Answer

a percentage of the franchise fee paid by the franchisee to the franchisor

Answer

a fee paid for the right to use a license to manufacture products

Answer

--

Answer

a percentage of the revenue generated by the sale of each unit that is paid to the owner of a license, or to a franchise developer

Question 2

Which business is not an example of a franchise?

Accepted Answer

Ebay

Answer

McDonald's

Answer

7-Eleven

Answer

Burger King

Question 3

Which of these is a disadvantage of operating a franchise?

Accepted Answer

higher start up costs

Answer

limited liability

Answer

lower marketing and promotional costs

Answer

more support

Question 4

When a company enters into a legal arrangement to allow its product, services, or business-format to be used by others for a fee it is called

Accepted Answer

franchising

Answer

franchisee

Answer

unrealistic

Answer

franchisor

Question 5

A company or individual who pays for the legal right to use the product, service, or format of another is called a

Accepted Answer

franchisee

Answer

franchisor

Answer

--

Answer

franchising

Question 6

Which of the following is among the requirements to be a successful franchisee?

Accepted Answer

All of the other answers

Answer

Be an organized person

Answer

Willing to work long hours

Answer

Willing to face personal sacrifice

Question 7

When deciding which franchise to purchase, which of the following aspects should be considered?

Accepted Answer

all of the other answers

Answer

Whether you enjoy that line of work

Answer

Profitability of the business

Answer

Potential business growth

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